Decreasing Employee Salaries via Benefits

Delivered January 22, 2020. Contributor: Joseph M.

Goals

To find information on the typical practices that tech companies use to financially decrease employee salary via benefits such as company lunches, snacks, travel stipends, etc. The purpose of research is to identify ways to decrease the salary of employees by paying for more with the company so that the company is taxed less.

Early Findings

The IRS Publication 15-B, Employer's Tax Guide to Fringe Benefits provides guidelines on the fringe benefits that are not taxable.

Proposed next steps:

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Preliminary research was able to identify employee benefits that are non-taxable. Consequently, we recommend additional research to identify 2-3 case studies of tech companies that use benefits and how they financially write them off for their taxes. Research will determine whether the companies pay for benefits and classify them as entertainment, fringe benefits, or something else, how the identified tech companies and startups pay for so many benefits and classify them for their tax code, and whether companies provide reimbursements for driving to work i.e. travel stipends, meals, health care, working from home, working from coffee shops etc.

Additionally, we recommend research to identify insights on at least 5 practices that tech companies can use to offer benefits to employees without tax liability.